There are many things involved when filing taxes that you do not understand, but when you start using a tax calculator everything will be an open book. Factors like your income, filing status, withholding and so on are used by the tax calculator to estimate your tax liability or refund. Here is more information about tax calculator software.
The tax calculator is easy to navigate through the interface to perform the tasks that you want. When you input the wrong figure the software will generate results based on those figures because it will not know if they are the right numbers or not. You should be keen with the numbers you input if you are positive that the tax calculator is outputting inaccurate results since software are developed with accuracy in mind.
Advanced version of the software considers more factors like other sources of income, your dependents, estimated payments, and deductions to give you more accurate results. The advanced tax calculator is appropriate for people with higher tax deductions than the standard deduction. Some of the tax deductions include donating to major charitable organizations, student loan and mortgage interest, child and dependent expenses, and medical costs.
Your tax liability will be approximated after the tax calculator finds the adjusted gross income (AGI), then the applicable tax rate for the applicable tax rate to be used in calculating the tax liability. Your tax refund is calculated if you’re overpaid but if you have been underpaid it will output your tax liability.
Selecting the right filing status on the tax calculator is also critical so that you do get misleading results. Wrong filing status means that the tax calculator will have to use the correct deduction and tax rate of that status on your income instead of using those of your true filing status. Qualifying Widower must have a dependent child with the deceased, and the husband must have passed away during the previous two tax years. If you are not married or have divorced during the tax year choose the single status.
Choose between fling the taxes with the Married Filing Separately or Married Filing Jointly alternatives if you married before or within the tax year. Pick an option that you and your spouse will agree on since both choices will have an impact on your standard deduction and tax rates. If you have lived with a dependent person for more than six months and paid half of the home maintenance cost within the tax year, you qualify to select the Head of Household. You don’t have to live with your parents to claim them as your dependents so long as you meet half of their financial support.